*

Global M&A volume up 14% to $846.8 billion

*

U.S. M&A volume slides 8% from last year

*

Asia Pacific deal volume surges 54%

*

Mars' $36 billion takeover of Kellanova ( K ) biggest deal of Q3

*

Private equity-led buyouts up 42%

By Anirban Sen and Andres Gonzalez

NEW YORK/LONDON, Sept 26 (Reuters) - Dealmakers are

bracing for a slowdown in global mergers and acquisitions in the

fourth quarter as companies postpone pursuing big targets ahead

of the U.S. elections, hoping this will only be a temporary

setback before a rebound next year.

Deals announced worldwide in 2024 totaled $846.8 billion as

of Sept. 25, up 14% from the year-earlier period, Dealogic data

showed. Of that, U.S. M&A volume was down 8% to $338 billion,

with stock gyrations, regulatory scrutiny and rates putting a

dampener on activity.

Dealmaking was more robust outside North America, with

Asia-Pacific surging 54% to $273 billion on the back of some

large deals - with the figures including a proposed cross-border

convenience store bid. Europe climbed 7% to $160 billion, the

data showed.

Companies are starting to put off their pursuit of

transformational deals until after the U.S. presidential

elections in early November, investment bankers and lawyers

said, as they want more certainty around regulatory and economic

policies under a new administration.

"It's not been the most exuberant of M&A years we've seen.

People have been more glass half empty than half full, I would

say," said Adam Emmerich, co-chair of the corporate department

at law firm Wachtell, Lipton, Rosen & Katz.

Increased scrutiny, especially from antitrust watchdogs

across the world, weighed on the number of so-called "megadeals"

worth more than $25 billion. Not a single transaction with an

equity value of $50 billion or more has been signed so far this

year.

Tom Miles, global co-head of M&A at Morgan Stanley, said

historically, such deals have been a driver of overall deal

volume. "It is clear that the lack of larger deals is a direct

result of some of the regulatory pressures that exist," Miles

added.

However, transactions in the $1 billion to $10 billion range

were up 27%. During the quarter, the total number of deals worth

$5 billion to $10 billion rose to 12 from 10 a year earlier, the

Dealogic data showed.

Candy giant Mars' $36 billion takeover of Cheez-It maker

Kellanova ( K ), Blackstone's $16 billion buyout of

Australian data center operator AirTrunk, and Verizon's

$9.6 billion acquisition of Frontier Communications

ranked as the largest deals of the quarter. Canadian convenience

store giant Alimentation Couche-Tard's ( ANCTF ) attempted $38

billion takeover of Japan's Seven & i ( SVNDF ) was rebuffed

earlier in September.

Companies flush with cash are focusing on deals that face

minimal risk of regulatory hurdles.

"Companies are looking to do big, creative deals, but will

only pull the trigger over the next couple of months if there is

low risk," said Jay Hofmann, co-head of M&A for North America at

JPMorgan ( JPM ).

Companies also want to avoid becoming "a campaign talking

point" in the election season, the dealmakers said, citing the

example of Nippon Steel's ( NISTF ) $15 billion bid for U.S.

Steel that is facing opposition from both Democratic and

Republican lawmakers.

PENT-UP DEMAND

Bankers are hoping the fourth-quarter slowdown will be

temporary, with a rebound next year after the U.S. elections and

as the Federal Reserve cuts rates to guide the economy to what

investors hope will be a "soft landing."

Frank Aquila, Sullivan & Cromwell's senior M&A partner, said

cross-border dealmaking is poised for a rebound as stronger

earnings growth from U.S. companies compared with their European

counterparts make them attractive targets for non-U.S. buyers.

Eric Tokat, co-president of investment banking at Centerview

Partners, echoed the sentiment. "I do anticipate 2025 to be a

robust year for M&A," he said. "There's quite a bit of activity

across the board. The question is, which ones turn into actual

large deals."

PE RETURNS?

Lower interest rates also bode well for private equity

firms, whose debt-fueled buyouts were hit hard by the Fed's

aggressive rate hikes in the aftermath of the pandemic to fight

inflation. The world's biggest private equity firms, armed with

tens of billions of dollars, have limited time under their terms

to invest that money and are preparing to pursue targets they

had shied away from previously, the bankers said.

"We're seeing private equity firms looking at bigger

companies again, whereas for quite a long period of time now,

they've been very focused on smaller, mid cap type situations,"

said Dietrich Becker, president and head of Europe at Perella

Weinberg Partners ( PWP ).

Global private equity-led buyouts during the quarter jumped

42% to $166.2 billion, buoyed by an improved financing market.

Private equity activity would also boost the initial public

offering market. "Sponsors who are buying from sponsors or from

corporates are increasingly looking at IPOs as an exit base

case," said Carsten Woehrn, co-head of M&A in EMEA at Goldman

Sachs ( GS ).

Still, fortunes are diverging among sponsors. The total

number of deals signed during the quarter fell 11% to 2,915, as

larger transactions helped offset declines from smaller deals

worth $500 million or less.

"This year a lot of small and mid-cap private equity funds

haven't had luck raising a new fund quickly, so they don't have

the fresh capital to deploy and that has muted the velocity of

deals in the smaller category as well," said Jason Sobol,

co-head of U.S. investment banking at Evercore.